Posted on 18 May 2023
A high-powered Indian delegation is set to tell the EU that New Delhi’s move to raise the duty on electronic goods—the subject of a dispute between the two sides —is no different from measures Europe has taken to protect its steel industry from Chinese imports.
New Delhi’s justification comes at an ongoing EU-India Trade and Technology Council (TTC) meeting in Brussels that is being attended by external affairs minister S. Jaishankar, commerce and industry minister Piyush Goyal and information technology minister Rajeev Chandrasekhar.
The meeting began on Tuesday.
The EU says India should apply a zero-duty rate to information and communication technology products like mobile phones according to its World Trade Organization commitments and has referred the matter to a WTO dispute panel, which has ruled in EU’s favour.
But India is set to argue in Brussels its move is similar to tariff barriers erected by the EU to protect its steelmakers.
“Our argument will be that Europe imposed Tariff Rate Quota (TRQ) on Chinese steel to protect its interest. Similarly, India has a concern in the case of mobile phones. India responded the same way Europe did. And India needs that policy space. We can discuss any concern that European industry has but the current policy is in India’s interest,” a government official privy to the discussions said.
TRQ is a tariff barrier that allows the EU to place a limit on imports of a set of products which it says impact its steel makers. The barrier applies to imports from China, Russia, South Korea, Turkey, Ukraine and India. As with the EU, the Indian duty too is primarily aimed at Chinese imports—more than 90% of Chinese electronic goods that come into India are of integrated circuits used in most electronic items. The EU claims that up to €600 million of its technology exports to India have been impacted every year due to the India tariff. The EU referred to the WTO panel in 2019 over this issue. India’s electronic goods exports jumped 26% to $2.1 billion in April this year compared to $1.67 billion in April 2022.
The talks at the TTC are significant because the WTO’s appellate tribunal is not functional and a resolution of the tariff issue could prevent prevent tension between India and the 27-nation bloc. The EU and India are in the middle of negotiations to conclude a free trade deal. At the same time, there are disagreements over an EU proposal to impose a ‘carbon tax’ on specific imports from india.
The creation of the EU-India TTC is significant for its focus on strategic technology. As geopolitical competition for technology heats up, nations have scrambled to forge emerging technology partnerships with like-minded countries.
Last week Mint reported that India is in talks with the UK to ink a similar strategic technology partnership. In 2022, India and the US announced an Initiative on Critical and Emerging Technologies which aims to bring the defence and scientific ecosystems in both countries closer.
This month, New Delhi and Washington are also set to hold the first edition of their Strategic Trade Dialogue which will focus on high-technology export controls.
India has 60 days in which to respond to the WTO dispute panel ruling. India plans to take to the case to the WTO’s appellate tribunal, which is non-functional at the moment.
If the WTO’s appellate body rules against India it could impact the country’s fast-growing manufacturing and exports of electronic goods—which is one of India’s key focus areas due to its strategic nature.
Source:Livemint
